A new round of tax reduction and fee reduction channels was opened, and 11 preferential tax policies were postponed

At the beginning of the new year, the tax reduction and fee reduction policy was precisely launched, and the central government once again injected a stabilizer into market confidence. The executive meeting of the State Council (hereinafter referred to as the meeting) held on the 19th decided to continue to implement some of the expired tax and fee reduction policies to support the rescue and development of enterprises.

At the beginning of the year, the tax reduction and fee reduction policy was announced, and Shi Wenpo, an associate researcher at the Public Revenue Research Center of the Chinese Academy of Fiscal Sciences, analyzed that this is to allow enterprises to better enjoy the policy dividend, stabilize confidence, and stimulate investment. The tax incentives are seamless, and the cash flow of enterprises will be greatly benefited compared with the first payment and refund. It is believed that the new tax reduction and fee reduction policies in 2022 will be announced one after another.

11 tax benefits extended

The meeting pointed out that tax reduction and fee reduction are direct, effective and fair policies to benefit enterprises and the people. In order to help enterprises solve difficulties and promote entrepreneurship and innovation, the meeting decided to continue to implement 11 other preferential tax policies involving science and technology, employment and entrepreneurship, medical care, education, etc. until the end of 2023 on the basis of the extension of some of the mature tax preferential policies in the previous period.

The first is to exempt eligible science and technology enterprise incubators, university science and technology parks and co-working space incubation services from vat, and exempt real estate tax and urban land use tax on real estate and land provided to incubated objects for their own use and for use. Continue to relax the criteria for the identification of start-up technology enterprises, and all eligible venture capital enterprises and angel investment individuals who invest in them will be deducted from the taxable income according to a certain proportion of the investment amount. Where enterprises recruit self-employed retired soldiers and retired soldiers to engage in self-employment, taxes and related surcharges will continue to be deducted sequentially according to a certain limit.

The second is to exempt agricultural products wholesale markets, farmers' market real estate tax and urban land use tax. Exempt from urban land use tax for operating land such as urban bus stations.

The third is to continue to authorize provincial governments to decide on their own to exempt, suspend or reduce the local reservoir migration support fund.

The fourth is to exempt medical personnel and epidemic prevention workers from personal income tax in kind such as temporary subsidies, bonuses, and preventive drugs issued by units to individuals. Exemption from registration fees for drugs and medical devices related to epidemic prevention products.

Fifth, it is exempt from the real estate tax of college student apartments and the stamp duty of related lease contracts. Enterprises undertaking commodity reserve policy business are exempt from real estate tax and urban land use tax for their own use of real estate and land. Tax on pollution prevention and control third-party enterprises will be levied at a reduced rate of 15%.

The 11 tax and fee reduction policies that continue to be implemented involve vat, income tax and other taxes. Shi Wenpo said that the continuation of the 11 expired preferential tax policies, involving a wide range of aspects, is of great significance to reduce the tax burden of relevant market entities and practitioners and stabilize social expectations.

Make sure the start is smooth

In 2021, the annual economic growth will be 8.1%, but the downward pressure on the economy will continue to increase. Growth was 18.3% in the first quarter, 7.9% in the second quarter, 4.9% in the third quarter and 4.0% in the fourth quarter.

In 2022, affected by multiple factors at home and abroad, the mainland's economic development is facing the triple pressure of demand contraction, supply shock and expected weakening. To stabilize confidence and stimulate investment, we must start with strength and start to compete.

Thousands of large and small market entities are related to the overall situation of economic development and the livelihood of hundreds of millions of people, carrying the employment and entrepreneurship of hundreds of millions of people. The Central Economic Work Conference held last month has determined that in 2022, we will continue to implement a proactive fiscal policy, implement a new tax reduction and fee reduction policy, strengthen support for small and medium-sized enterprises, individual industrial and commercial households, manufacturing, risk mitigation, etc., and moderately advance infrastructure investment.

Tang Jiqiang, a professor at Southwestern University of Finance and Economics, analyzed that tax reduction and fee reduction are based on the reduction of government tax revenue in a certain period of time in exchange for the overcharging of the current interests of enterprises and future economic development. In the short term, tax reduction and fee reduction can reduce the burden on enterprises and enhance the development potential of enterprises. In the long run, tax cuts and fee reductions are conducive to optimizing the economic structure, stimulating investment and consumption, and promoting high-quality economic development.

Steady confidence stimulates investment

While stabilizing confidence, tax cuts and fee reductions will also stimulate investment, promote economic transformation, and stimulate the dreams of entrepreneurs.

The effect of tax reduction and fee reduction that has lasted for many years has emerged. In 2021, the national high-tech manufacturing investment increased by 22.2% over the previous year, which was 17.3 percentage points higher than the national fixed asset investment growth rate. With the enhancement of the driving role of innovation, the development trend of industrial upgrading is improving, and the investment in innovation of enterprises is increasing, promoting innovative development and building a new development pattern, which contains huge investment momentum. According to Ning Jizhe, director of the National Bureau of Statistics, a series of policies and measures conducive to manufacturing investment, enterprise R&D investment, and technological transformation investment will be introduced this year.

After the executive meeting of the State Council announced the continuation of the partially expired tax reduction and fee reduction policy on the 19th, Shi Wenpo said that the science and technology enterprise incubator, university science and technology park and co-creation space incubator will continue to be exempted from relevant taxes, which will help reduce the tax burden of the innovation service platform, improve the guarantee capacity of the innovation service platform, and optimize the innovation environment. Relaxing the criteria for identifying start-up technology-based enterprises can attract and motivate venture capital enterprises and angel investment individuals, and support more start-up innovative enterprises to develop.

According to the requirements of the central government to implement a more intensive tax reduction and fee reduction policy this year, Shi Wenpo expects that new tax and fee reduction policies will be introduced in the near future to further support scientific and technological innovation and help stabilize investment and steady growth.